After Decades Of Fraud And Failuire In Carbon Markets, UN Launches Another One, Filled With Loopholes & Exemptions
The United Nations’ market for carbon trading will soon be open for business. Approved at the U.N. climate conference in Baku, Azerbaijan, last month, it will for the first time give the U.N.’s seal of approval to large-scale trading of carbon credits between nations. The aim is to help kick-start a multi-billion-dollar global carbon economy that will allow industrial countries to meet their emissions targets under the 2015 Paris Agreement by paying other nations to protect and restore forests or carbon-rich peatlands. At the front of the queue for selling credits is Indonesia, whose newly elected populist president Prabowo Subianto is reportedly planning to generate billions of dollars in revenues through bilateral deals to sell credits generated in his country’s vast rainforests.
But within days of being signed off in Baku, after almost a decade of negotiations, the Paris Agreement Trading Mechanism is being decried as full of loopholes. Critics say the new trading market, which is expected to launch as soon as next year, is wide open to the bad carbon accounting and outright fraud that has bedeviled recent company-to-company “voluntary” trades and to double-counting of credits, making a mockery of efforts to slash global emissions.
“Countries face no real repercussions if they fail to abide by the rules,” according to an initial analysis by the think tank Carbon Market Watch. Kate Dooley, an expert on carbon accounting at the University of Melbourne, Australia, says that “there are no timelines for compliance or for policing the rules” governing country-to-country trading, noting that nations can opt to keep much of the information about those deals confidential. She believes Indonesia is likely to engage in extensive bilateral deals between governments that avoid U.N. oversight as an “easy way to transact large volumes of credits.”
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The Katingan Mentaya project presumes that, without its intervention, the forest within its boundaries would have been entirely logged and the peatland beneath drained to make room for industrial timber plantations. But would that actually have happened? The scenario might have been justified when the project was first proposed almost two decades ago. Back then, the Indonesian government was still pushing agricultural development in forests. But independent analysts conclude that today such large-scale logging is extremely unlikely, especially in a peatland.
Greenpeace found that there have been no such major forest clearances in Central Kalimantan’s other swamp forests. And since 2011, before the project started selling credits, successive governments have maintained a moratorium on issuing new licences for clearing forest or draining peatland. So, the project area has long been legally off-limits to such development, which means that the project’s carbon credits do not reflect realistic carbon gains. These doubts about carbon accounting highlight a global problem with the poorly regulated market in credits sold to companies looking to offset their emissions. Environmentalists have long said that carbon benefits — and the credit sales they enable — have been widely inflated by implausible baseline scenarios. And recent research backs up their skepticism. An international study published in Nature last month found that just 25 percent of carbon credits sold as representing avoided deforestation delivered “real” emissions reductions.
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https://e360.yale.edu/features/indonesia-carbon-credits-bioeconomy